Jireh Fabrication Company is in the process of preparing the cash budget for the last four months of 2015 that is September to December. The following information has been made available. . Projected sales Sept. Oct. Nov. Dec. Quantity (units) 60000 70000 65000 65000 ii. Selling price is GH¢10 per unit but expected to drop by 5% from 1st November. ii. Payment for goods sold is as follows; 20% in the month of sales, 60% the following month after sales and the balance in the second month after sales. Bad debt is estimated at 2% of sales value. iv. Purchases of goods at GH¢6 per unit are as follows: September 70000 units, October 70000units, November 72000 units and December 65000 units. v. Goods purchased are paid one month in arrears. vi. Monthly expenses estimated at 12% on sales revenue are paid in the month of incurrence vii. The company plans to buy a delivery van at GH¢270000, 40% of the cost to be paid in October and the balance in January 2015. viii. The Director withdraws GH¢20000 monthly for personal expenses. ix. Extracts from August figures are as follows: a. Debtors GH¢460000 out of which GH¢100000 is part of July sales before bad debt b. Creditors for goods GH¢200000 c. Cash GH¢70000 Required: Prepare Monthly cash budget for the four months ending December 2015
Jireh Fabrication Company is in the process of preparing the cash budget for the last four months of 2015 that is September to December. The following information has been made available. . Projected sales Sept. Oct. Nov. Dec. Quantity (units) 60000 70000 65000 65000 ii. Selling price is GH¢10 per unit but expected to drop by 5% from 1st November. ii. Payment for goods sold is as follows; 20% in the month of sales, 60% the following month after sales and the balance in the second month after sales. Bad debt is estimated at 2% of sales value. iv. Purchases of goods at GH¢6 per unit are as follows: September 70000 units, October 70000units, November 72000 units and December 65000 units. v. Goods purchased are paid one month in arrears. vi. Monthly expenses estimated at 12% on sales revenue are paid in the month of incurrence vii. The company plans to buy a delivery van at GH¢270000, 40% of the cost to be paid in October and the balance in January 2015. viii. The Director withdraws GH¢20000 monthly for personal expenses. ix. Extracts from August figures are as follows: a. Debtors GH¢460000 out of which GH¢100000 is part of July sales before bad debt b. Creditors for goods GH¢200000 c. Cash GH¢70000 Required: Prepare Monthly cash budget for the four months ending December 2015
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:Jireh Fabrication Company is in the process of preparing the
cash budget for the last four months of 2015 that is September to
December. The following information has been made available.
i. Projected sales
Sept.
Oct.
Nov.
Dec.
Quantity (units) 60000
65000
65000
70000
ii. Selling price is GH¢10 per unit but expected to drop by 5%
from 1st November.
iii. Payment for goods sold is as follows; 20% in the month of
sales, 60% the following month after sales and the
balance in the second month after sales. Bad debt is
estimated at 2% of sales value.
iv. Purchases of goods at GH¢6 per unit are as follows:
September 70000 units, October 70000units, November
72000 units and December 65000 units.
v. Goods purchased are paid one month in arrears.
vi. Monthly expenses estimated at 12% on sales revenue are
paid in the month of incurrence
vii. The company plans to buy a delivery van at GH¢270000,
40% of the cost to be paid in October and the balance in
January 2015.
viii. The Director withdraws GH¢20000 monthly for personal
expenses.
ix. Extracts from August figures are as follows:
Debtors GH¢460000 out of which GH¢100000 is part
of July sales before bad debt
b. Creditors for goods GH¢200000
c. Cash GH¢70000
а.
Required:
Prepare Monthly cash budget for the four months ending
December 2015
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education